Over 310.4 million wearable devices will be sold worldwide in 2017 -- an increase of 16.7 per cent from 2016. Sales of wearable devices will generate revenue of $30.5 billion in 2017. Of that, $9.3 billion will be from smartwatches.
Apple will continue to lead the smartwatch segment, however, as more providers enter the market, Apple's market share will decrease from approximately a third in 2016 to a quarter in 2021.
The company is expected to launch a new Apple Watch which will enable direct cellular connectivity for interacting with Siri, texting and transferring sensor data when the phone or Wi-Fi is not present. The new Apple watch could launch on September 12 alongside iPhones.
Consumer electronics brands such as Asus, Huawei, LG, Samsung and Sony will sell only 15 per cent of smartwatches in 2021, because their brands do not have as strong an appeal as lifestyle brands for personal technologies, Gartner said.
In 2017, 41.5 million smartwatches will be sold and by 2021, sales of smartwatches are estimated to total nearly 81 million units, representing 16 per cent of total wearable device sales.
"Smartwatches are on pace to achieve the greatest revenue potential among all wearables through 2021, reaching $17.4 billion. The overall ASP of the smartwatch category will drop from $223.25 in 2017 to $214.99 in 2021 as higher volumes lead to slight reductions in manufacturing and component costs, but strong brands such as Apple and Fossil will keep pricing consistent with price bands of traditional watches," said Angela McIntyre, Research Director at Gartner.
Two sub-categories that the Gartner expects to perform well are kids' smartwatches and traditional watch brands, which will emerge as significant segments for smartwatches. Gartner expects kids' smartwatches to represent 30 per cent of total smartwatch unit shipments in 2021.
The other sub-category, which will account for 25 per cent of smartwatch units by 2021, is fashion and traditional watch brands.
The Bluetooth headsets will account for 48 per cent of all wearable devices in 2017. Over 150 million Bluetooth headsets will be sold in 2017 – representing an increase of 16.7 per cent from 2016. Driven by the elimination of the headphone jack by major smartphone providers, sales will increase to 206 million units in 2021, meaning Bluetooth headsets will remain the most sold wearable device through 2021.
Head-mounted displays (HMDs) account for only seven per cent of all wearable devices shipped in 2017, and will not reach mainstream adoption with consumers or industrial customers through 2021.